2023 (10) TMI 352 - AT - Service Tax

Exemption from service tax - Transmission and distribution of electricity - work executed as sub-contractor, on back to back basis, allotted by the main contractor - benefit of N/N. 45/2010-ST dated 20.07.2010 denied - Commercial or Industrial Construction service (CICS) - work being earth work, laying of concrete, shuttering rod bending. HELD THAT - There is no ambiguity in the exemption granted for services provided to distribution and transmission companies vide Notification No. 45/2010-ST, and the reliance placed by the Revenue on the clarificatory Circular dated 01.07.2010 is misplaced. Further, it is found that there is no reference of earlier Notification No. 11/2010-ST in the Notification No. 45/2010- ST and hence, attempt by the Revenue to read the exemption notification with the previous notification, is also misplaced. There is no error in the Impugned Order - Appeal of Revenue dismissed.

Summary

Issues involved:
The issues involved in the judgment are the demand of Rs.9,08,67,712/- under the category of "Erection, Commissioning & Installation service" (ECIS) and the demand of Rs.10,30,000/- under the category of "Commercial or Industrial Construction service" (CICS) for the period from April, 2006 to March, 2011.

Issue 1: Demand under ECIS:
In the first round of litigation, a demand of Rs.9,08,67,712/- was confirmed under ECIS for work executed as a sub-contractor, allotted by the main contractor. The learned Commissioner in the Impugned Order dropped this demand by extending the benefit of Notification No. 45/2010-ST dated 20.07.2010, which exempts taxable services in respect of transmission and distribution of electricity from payment of service tax when the service recipient is a transmission or distribution company. The Revenue contended that the exemption is for transmission and distribution of electricity, not for the providers of the service to these companies. However, the Tribunal found that the Appellant was eligible for exemption under Notification No. 45/2010-ST as they were not electricity distribution licensees, franchisees, or authorized to distribute power under the Electricity Act, 2003. The Tribunal upheld the Impugned Order, stating there was no error in it.

Issue 2: Demand under CICS:
The second demand was for Rs.10,30,000/- under CICS for work including earthwork, laying of concrete, shuttering & rod bending. The Tribunal noted that this demand was no longer contested by the Appellant as it had been settled under the SVLDR Scheme on 13.01.2020, and a discharge certificate had been issued in Form SVLDRS-4. The Tribunal did not delve further into this demand as it had been settled.

Conclusion:
The Tribunal upheld the Impugned Order, dismissing the Appeal by Revenue regarding the demand under ECIS. The Appellant was found eligible for exemption under Notification No. 45/2010-ST for services provided to transmission and distribution companies. The Tribunal found no error in the Impugned Order and granted consequential benefits to the Respondent/Assessee in accordance with the law.